There cannot be
many individuals in Canada, or elsewhere for that matter, who combine Sylvia Ostry's
extraordinary depth and breadth of experience in the area of trade, and economic policy
more generally. Nor can there be many who match her record of excellence in her chosen
field. Sylvia Ostry has served as a high official in her government, she has held a senior
position in a prominent international institution - the OECD, and now, from her academic
vantage point, she is making a signal contribution to our understanding of the complex
world we live in. Many of the ideas and issues I shall talk about this afternoon have been
influenced by Sylvia's work.

It gives me great
pleasure, therefore, to deliver the Fourth Annual Lecture of the Sylvia Ostry Foundation.
Before continuing, however, I would just like to say one thing to Sylvia, whom I am proud
to count as a long-standing friend: 'Sylvia, please go on doing what you do so well. We
greatly value your insights, your capacity to interpret economic trends and events, and
your eye for sound policy prescription. We need you now more than ever'

The Global
Imperative

It must be
true that practically every generation in history has lived through change - be it social,
economic or political. And no doubt change has been viewed in every generation with a
blend of apprehension and anticipation - apprehension at the discomfort it might
represent, and anticipation at the opportunities it can offer. Some periods are more
turbulent than others, but I wonder how many generations in years gone by have had to
contend with the extraordinarily rapid change that characterizes our times.

What kind of
change am I talking about, and what is driving it? The change I refer to is the dramatic
internationalization, or globalization, of economic activity over the last two or three
decades, and the profound political and social consequences that flow from this. A
powerful confluence of forces drives globalization. Some of them no doubt reflect
government policies, but more fundamentally, these are forces with a life of their own -
forces unleashed by technological change, especially in the fields of transport and
communications.

In economic
terms, globalization means that production and trade have become inexorably intertwined.
Production processes are spread across the globe. Producers must invest to trade and trade
to invest. Most products entering the market today are either traded, or heavily reliant
on traded components for their production. The fact that trade plays a greater role in
economic activity than it ever has before is easily discernible from statistics - trade
flows have multiplied fifteen-fold in the last four decades, while production has
increased six-fold. At the same time, dramatic increases have been registered in flows of
foreign direct investment - in the ten years to 1993, investment flows worldwide
quadrupled, to almost 200 billion dollars per annum. More and more jobs rely on trade, on
the side of both imports and exports. All this has taken place against steadily rising
living standards in many, but not all, countries. The fact that the benefits of
globalization are yet to be globally enjoyed presents a policy challenge to which I shall
return. However, no-one should underestimate the extent to which global economic
integration has helped, and is helping, to reduce poverty and marginalization. In the next
few years two billion people in developing and transition economies are expected to enter
the global marketplace, reinforcing the trends which have put a dozen or more developing
countries among the world's most dynamic economies.

In political
terms, globalization means that governments must learn to cooperate in more areas than in
the past. Some of the distinctions we used to make between international policy and
domestic policy look increasingly facile and irrelevant. Tensions naturally arise as
governments are perceived as having an ever more intrusive interest in each others'
policies, and these tensions must be managed with deftness and political agility. As the
domain of international rule-making and policy coordination expands, and the notion of
"domestic" policy assumes a narrower focus, adequate care must be taken to
safeguard diversity and preserve democracy. At the same time, defensive arguments based on
sovereignty must be recognized for the illusion that they are. The true expression of
sovereignty in today's world is the capacity of democratically elected governments to
articulate the interests of their constituents through negotiations and international
commitments.

In social
terms, managing globalization is also a major challenge. It is disingenuous to pretend
that market-opening, continuing international economic integration, and trade
liberalization will always be painless. Some people may well be displaced through the
resource allocation shifts that occur as a result of these processes. But we should be
clear about the whole picture. The efficiency gains from specialization through trade
stimulate economic activity and create jobs, more than making up for what may be lost
through job displacement. Managing this transition, and dealing with the distributional
consequences of change is a fundamental responsibility of governments, but definitely not
one that will be met by shying away from the world marketplace.

Globalization
will not go away. Policy-makers could not stop the process, even if they wanted to. It is
not something which is optional, but a part of our normal everyday life in countless ways.
The only real question is whether or not we accompany its advance with domestic policies
which will help us adapt to the reality of change without an unbearable social cost.

Internationally,
the choice is whether this inevitable process will take place within a system based on
agreed rules or simply on power. In the post-war period we have generally tried to follow
the first alternative. To abandon it now would change the economic - and possibly
political - history of the world in a dangerous way for all its people.

The WTO's
first 18 months: highlights and shadows

Before
turning to what I see as some of the major issues we need to address in the coming months
and years, I would like to look briefly with you at the WTO's first year and a half. It is
a picture of light and shadow, of commitments implemented and others which remain still
unfinished business.

The highlights
include:

* implementation
of Uruguay Round agreements: it has been a good start, but there is no room for
complacency. The full and prompt implementation of commitments is essential for the
credibility of the WTO and for building confidence on which to explore the trade agenda
that lies ahead.

* dispute
settlement: we now have a more effective and credible mechanism for the resolution of
trade disputes. So far, 38 complaints have been brought to the WTO; and a significant
number of cases have been settled "out of court" - that is, resolved at the
consultation stage which is an essential part of the procedure. This is strong testimony
to the deterrent effect of the system.

* establishment
of the Appellate Body, whose first decision has just been handed down - a very
difficult decision in view of the numerous criteria involved.

* increasing
membership: the WTO now has 121 Members. The fact that 29 countries are negotiating to
join (including China and Russia) shows the vitality and the attraction of the
multilateral system. Individual countries may join the WTO seeking economic benefits, but
the global gain will also be more stable international relations. Clearly, we are close to
realizing the long-sought goal of a multilateral trading system of universal membership,
based not on weakened membership requirements but on a strengthened desire on the part of
governments to participate fully in the globalizing world economy.

* trade
and the environment: The WTO's Committee on Trade and Environment has a wide-ranging
agenda, which has been examined at some length by the Committee. This discussion has
provided a good basis for further progress in this important but often controversial area,
both clarifying the issues at stake and bringing formerly divergent views closer together.
In its report to the Ministerial Conference in Singapore, the Committee will be in a
position to better define areas for further examination and might be ready to suggest
certain policy improvements to promote environmental concerns while at the same time
enhancing or facilitating international trade.

The shadows
appear when we recall that implementation also includes the commitment to continue
negotiations in four important sectors of trade in services which were made at the end of
the Uruguay Round. Now that we have at least an interim result on three of these -
financial services, the movement of natural persons (those who provide services) and basic
telecommunications - I would like to say something about what has been achieved - and what
remains to be done.

You will
remember that last July a negotiation on financial services ended with a muted or
mitigated success: 29 countries agreed to improve their commitments under the GATS, but
the US found the package unsatisfactory and was unable to make any offer as to future
access to its financial services market. The negotiations will be resumed in 1997 and then
I hope, and expect, an improved package, with the US as a full participant, will be
agreed. In the negotiations on basic telecommunications, which ended on 30 April, a very
interesting and worthwhile harvest of market opening offers, plus substantial progress in
the area of competition and the behaviour of state monopolies, was achieved. But again it
was impossible to finalize the deal, because the US considered the result unsatisfactory.
The negotiators agreed to preserve the results achieved so far with the objective that
they can be improved further in a brief period of renewed negotiations in January/February
next year, and to maintain the date of 1 January 1998 for their entry into force. I
believe this process too will be brought to a successful conclusion in 1997.

The fourth
sectoral negotiation, on maritime transport, is now in progress. It too is facing
difficulty, following a statement by the US that it will not make an offer, in the light
of its assessment of the offers made by others. We must ensure that an acceptable result
can nevertheless be reached by the end of June, but it will not be easy.

It is too
early to draw up a balance sheet. But I think one preliminary conclusion, at least, can be
drawn. It is not impossible for a negotiation in a single sector to produce worthwhile -
even surprisingly good - results. The telecoms negotiations proved that - and in my
opinion the results in financial services were also much better than might have been
expected from a short negotiation in a single, highly sensitive sector.

Of course we
should not underestimate the impact of missing the date of 30 April for the formal
conclusion of the telecom negotiations, or of the result so far in financial services. But
it would be equally wrong to overstate the case. The history of international negotiations
- especially trade negotiations - is full of missed targets. If we allow every such
instance to become a drama we only make it harder to go on to eventual success.

One final
comment: these negotiations became classed as unfinished business because it was not
possible to bring them to resolution even in the magic moment of the end of the Uruguay
Round. So by definition they must be considered among the hardest cases. It is thus no
wonder if they could not be settled in one further attempt - but up to now none has been
an outright failure. This is all the more reason why we cannot accept a failure in the
maritime sector.

The Road
to Singapore

It is against
this background of light and shadow that preparation is underway for the WTO's first
Ministerial meeting, which will be held in Singapore in December. Certainly the
Ministerial will provide a chance to take stock of what has been achieved after two years,
but the concentration of political force it represents could be wasted if we do not also
have more ambitious goals. Let me outline some possible areas where I think it is
realistic to expect Singapore to help the multilateral system to move forward as it must.

One such area
is further liberalization in goods and services trade - and through improvements in
the trade rules. There is a debate on what further liberalization can really mean. Some
delegations do not want to change the commitments already taken at the end of the Uruguay
Round, and prefer to remain with the time-horizon of 1999 or 2000. Some others, on the
contrary, suggest considering possibilities including accelerated or additional tariff
reductions; undertaking further work on professional services; and working towards the
harmonization of technical standards and the simplification of rules of origin. Other
possibilities will no doubt emerge as we continue the preparatory discussions.

The
discussions that are going on among a number of countries about liberalizing trade in
information technology are a particularly encouraging development, one which should also
complement and reinforce the opening-up of telecommunications services. I hope that any
eventual agreement will be made on a multilateral basis, to make the most of its benefits
both to the global economy and the trading system.

Ministers at
Singapore will also have before them the "built-in agenda" of the WTO - the
commitments which already exist to begin new negotiations in agriculture, services and
other areas before the turn of the century. The "built-in agenda" also touches
on some of the other subjects which various members have proposed for the WTO's work
programme, such as investment and competition. I would like to say something about each of
these.

As far as investment
is concerned, globalization has dramatically reduced the utility of distinctions that
policy makers used to maintain between different forms of market access.

In this
setting, it seems to me that no rationale can be offered for not having multilateral
investment rules while we have multilateral trade rules. In the Uruguay Round, the
negotiation on trade-related investment measures - or TRIMS - resulted in a mandate to
look at investment issues with a view to considering whether the TRIMS Agreement should be
complemented with provisions on investment. At the same time, negotiations in the field of
trade in services have led to substantive commitments on investment in a wide range of
sectors. These commitments apply to the right of foreign investors to establish
themselves, as well as to conduct business once they are established. In addition to these
sector-specific undertakings, WTO Members are committed to providing m.f.n. treatment with
respect to all trade in all services, except in the relatively few cases where narrow
exceptions to m.f.n. have been inscribed.

Notwithstanding
the significance of what we have already achieved in services, I believe we need a more
horizontal and all-encompassing approach to investment in the WTO, particularly as nothing
has been done so far in the sphere of goods. Multilateral rules in this area should build
on the WTO principles of m.f.n. and national treatment, thereby contributing to a policy
environment that encourages and safeguards foreign investment, especially in the great
majority of developing and least-developed countries who are at present largely outside
the main flows of foreign direct investment. The OECD, as well as some regional trade
agreements, have already developed, or are in the process of developing international
investment rules. But I believe governments will increasingly recognize the need for work
on this issue in a more global setting.

There is a
risk, in the absence of a strong multilateral framework, of an accumulation of potentially
inconsistent and even discriminatory regimes in regard to foreign investment. The question
is how to ensure a truly multilateral dimension to this question that takes account not
only of the role of investment within the international trading system, but also of the
common interest that both industrial and developing countries have in ensuring a
favourable investment climate. It is hard to imagine that an answer can be found outside
the WTO. There are currently more than 900 bilateral investment treaties. And if all
countries in the world were to participate in such agreements, we would need around 20,000
bilateral treaties. This fact provides a clear answer to those who preach the superiority
of a bilateral approach. I cannot imagine that business would welcome such a bewildering
variety of requirements. It is clearly preferable to have just one set, covering all
countries, developed and developing alike, under the same rules and disciplines and with
just one enforcement procedure.

The TRIMs
Agreement also contains a mandate to consider the need for rules on competition policy.
The GATT and WTO have sought to enhance competition for the last 50 years through
promoting trade liberalization. More explicitly, competition questions were taken up in
the Havana Charter, and came onto the Uruguay Round agenda through the negotiations on
basic telecommunications. I believe it is important for us to examine this question
thoroughly in the WTO setting. As government-mandated and supported policies have become
less trade-restricting, attention focuses increasingly on market barriers maintained by
enterprises - that is, barriers that are intrinsic to the structure of markets and
independent of any government policy.

We need to
determine, firstly, how pervasive and problematic such barriers may be. Secondly, we must
ask whether these should be dealt with nationally, or whether we need international
disciplines to ensure the proper functioning of markets. And if we do need an
international approach, what should it be? Should we create a right of multilateral action
that commits government to implementing their national competition policies, or should we
go further and write substantive competition rules? These are interesting and important
questions that we must address. We can certainly learn something from the negotiations on
basic telecommunications, where governments clearly felt the need to spell out and commit
themselves to specific, multilateral pro-competitive principles.

Whether or
not we recognize it, competition is making itself part of our agenda. It is just a
question of when and how this becomes explicit.

Beyond the
built-in agenda, issues which have been proposed by some countries include trade and
labour standards (the most potentially controversial of all these subjects). No-one
can deny the importance of core labour standards that have been internationally agreed.
But the issue is now about the extent of the relationship with trade and the best forum
for discussion. This is why this issue remains potentially divisive. There is a shared
responsibility to avoid a dramatization of it at the Ministerial Conference. If this were
to happen, it is certain that the people whose interests we all want to protect would not
be in any better position.

Proposals
also include the problem of corruption in international trade, which has been
linked with the need for further work on government procurement; the question of regionalism;
and the adaptation of the trade rules to the global economy. The issue of the effects of
commodity prices, exchange rates and debt on developing-country trade earnings has
been raised orally.

These
suggestions will need to be approached with objectivity and care, in line with the
principle of consensus which has always guided the multilateral system. Developing a
consensus in these areas will be a serious challenge - but the multilateral trading system
has successfully met such challenges in the past (for example when services and
environment were brought into the picture).

One of the
most notable changes on the world trading scene in the last decade or so has been the
death of the North-South divide - an event as significant as the demolition of the Berlin
Wall. This change is attributable in large measure to the embrace of market-opening and
liberalization policies in countries at all levels of development. A priority for
Singapore is to sustain this new unity.

If we are to
move forward to develop a trade agenda for the 21st century, it is essential to have a
solid base of confidence among all the members of the trading system that it is working in
their interests.

The
Challenges Ahead

Shaping the
trading system of the new century means above all responding to four fundamental
challenges.

The first is
to do a better job than we are doing at present in conveying to people everywhere the
message that open trade and the multilateral system work in their interest. We have to
recognize that the rapid advance of global integration has contributed to a climate of
uncertainty in many societies, a situation which is ripe for exploitation by those who
peddle the quack remedies of protectionism and xenophobia. What is urgently needed is for
governments, the private sector and academics to work together to restate clearly and
persuasively the truth that the past 50 years of our history makes so evident - that open
trade within the rules of the multilateral system is the key to growth, and hence to all
our hopes of a more prosperous and stable existence.

The second
challenge is to respect and strengthen the fundamental contract that now unites countries
at all levels of economic development. The industrialized world has to keep open its
markets and improve their openness in the years ahead. On their side, the developing
countries have to continue with their liberalizing reforms and increase their integration
into the global system. And together, both industrialized and developing countries have to
work to improve the situation of the least-developed.

I believe
that raising living standards in these countries is one of the most urgent tasks before
us. It has been estimated that while incomes per head are expected to rise by 80 per cent
on average in East Asia between now and the year 2005, the comparable figure for
Sub-Saharan Africa is only 8 per cent. How can we help to narrow this widening gap and to
promote development in the poorest countries?

At the very
least, we must ensure that all markets are completely and securely open to the goods and
services produced by these countries. A commitment to bind all tariffs that they face at
zero and eliminate all remaining quantitative restrictions on their exports by a firm date
would be one useful initiative. There are many other ways in which we could assist, such
as improving their access to investment (another reason for taking this issue up in the
WTO), encouraging regional initiatives among least-developed countries, and applying more
flexible rules of origin to their products.

Equally
important is building up their institutional and human capacity so that they are fully
able to take advantage of improved opportunities. This calls for some fresh approaches,
both in the cooperation among agencies providing technical assistance and in the means by
which they do so.

The WTO has
made a start in this direction, by developing an integrated technical cooperation plan
with UNCTAD and the International Trade Centre, which we jointly sponsor. There is clearly
more to be done in promoting such cooperation. We must also work closely together with all
other relevant agencies to exploit to the full the opportunities new communications
technology offers to extend the scope and the lasting impact of our capacity-building
efforts.

Lastly, there
is a need to pay serious attention to the situation of net food-importing developing
countries who - for a variety of reasons - are facing rising prices for a number of
agricultural commodities.

The third
challenge is universality - the need to bring China, Russia and all the other countries
still outside into the WTO system. We can only reap the full benefit of a rule-based
global trading system when this is achieved. No-one is under any illusion that the process
is an easy one. The accession of large transition economies, in particular, raises
significant questions of substance whose answers need to strike an acceptable balance
among the aspirations of the candidate countries, the interests of existing members and
the need to safeguard the integrity of the system and its rules. There is no quick
political fix to these issues. Aspiring and existing members alike share in the
responsibility of ensuring that the accession negotiations proceed as rapidly as possible
but in a way which strengthens the system as a whole.

The fourth
challenge is to make sense of the relationship between regionalism and the multilateral
trading system. It is less than fifteen years since the dramatic explosion in regional
agreements occurred, making such arrangements the prominent feature of international
economic relations that they are today. In 1980, relatively few customs unions and free
trade areas existed, but now nearly all WTO Members belong to one or more regional trading
arrangement. Apart from the European Community, what arrangements there were fifteen years
ago tended to be limited in scope and to focus primarily, if not exclusively, on
preferential tariffs. The new wave of regional trading arrangements can be said, like so
many things, to have started in North America.

Indeed,
Canada played a pivotal and initiating role in the establishment of a free trade agreement
in North America, which was soon to be extended as NAFTA. And now, there are plans for a
hemispheric free trade agreement, which would also build on existing arrangements in South
America, such as MERCOSUR, the ANDEAN Pact and the Central American Common Market. In
Asia, we see ASEAN recently expanding its geographical coverage and deepening the
integration process. The South Asian countries are also developing a regional arrangement.
And, of course, we have APEC, which, while not as yet involving trade preferences among
its members, embodies an ambitious vision of free trade among countries in Asia and also
across the Pacific Basin to North and South America. In Africa, several regional
arrangements are being developed. In Europe, the European Union has built up a complex
hierarchy of preferential arrangements involving all its immediate neighbours, and has
wider schemes in prospect. The idea of a Trans-Atlantic free trade agreement has also
attracted considerable attention recently.

The regional
liberalizing impulse is not in itself cause for alarm among the upholders of the
multilateral system. Regional initiatives can contribute significantly to the development
of multilateral rules and commitments, and in regions such as Sub-Saharan Africa they may
be an essential starting-point for integration of least-developed countries into the wider
global economy. At the most basic level the real split is between liberalization, at
whatever level, and protectionism. Viewed from this perspective regional and multilateral
initiatives should be on the same side, mutually supportive and reinforcing.

However the
sheer size and ambition of recent regional initiatives means we can no longer take this
complementarity for granted, if indeed we ever could. We need a clear statement of
principles, backed up by firm commitments, to ensure that regional schemes do not act as a
centrifugal force, pulling the multilateral system apart.

The answer is
to be found, I suggest, in the principle which some of the newer regional groupings have
enunciated - Open Regionalism.

Of course, we
need to be clear about what open regionalism means. Among the different possibilities, I
see two basic alternatives.

The first is
to ensure that any preferential area under consideration will be consistent with
the legal requirements of the multilateral system. The existing provisions mean that such
areas could at the same time be legally compatible with the WTO's rules and preferential
in their nature, which means they can be an exception to the m.f.n. clause which is the
basic principle of the multilateral system. The possibility of making such a legal
exception to the m.f.n. principle within the rules was conceived in a completely different
time and situation. Today, with the proliferation of regional groupings, the exception
could become the rule, and this would risk changing completely the nature of the system.

The second
interpretation of open regionalism is the one I hear from a number of governments
including some members of APEC or MERCOSUR. In this scenario, the gradual elimination of
internal barriers to trade within a regional grouping will be implemented at more or less
the same rate and on the same timetable as the lowering of barriers towards non-members.
This would mean that regional liberalization would in practice as well as in law be
generally consistent with the m.f.n. principle.

The choice
between these alternatives is a critical one; they point to very different outcomes. In
the first case, the point at which we would arrive in no more than 20 to 25 years would be
a division of the trading world into two or three intercontinental preferential areas,
each with its own rules and with free trade inside the area, but with external barriers
still existing among the blocs.

Is this the
sort of world any of us would want?

I leave you
to imagine the consequences of this vision in terms of world stability and security;
where, for example, would China and Russia be in such a world?

The second
alternative, on the other hand, points towards the gradual convergence of
regionalisms and multilateralism on the basis of shared aims and principles, first and
foremost respect of the m.f.n. principle. At the end, we would have one free global market
with rules and disciplines internationally agreed and applied to all, with the capacity to
invoke the respect of the rights and obligations to which all had freely subscribed. In
such a world there could and must be a place for China, Russia and all the other
candidates to the WTO.

Given the
reality of regionalism, and the necessity to maintain the central importance of the
multilateral system, the question comes down to how best to ensure this gradual
convergence takes place.

Should it,
for example, be left to concerted unilateral effort or be the subject of a multilateral
negotiation, in the same way as past enlargements of the European Community helped spark
previous GATT Rounds?

Should we
attempt to set a time-limit within which regional liberalization of market access would be
followed either by its extension on an m.f.n. basis or the start of multilateral
negotiations?

Where
regional groupings establish new trade rules, should we seek to agree on a mechanism and a
time-frame under which they would be brought into full conformity with the multilateral
rules where they exist? In cases where there are as yet no equivalent WTO rules we will
need to consider a timetable for negotiating their multilateral application.

Maintaining
the primacy of the WTO's rules and dispute settlement system is vital, not as an end in
itself, but in order to avoid a bedlam of competing and contradictory jurisdictions. As I
mentioned earlier, the current evolution of rules on investment gives some early warning
of what this could be like.

If we do not
uphold the primacy of the multilateral rules, we risk seeing a form of Gresham's Law
operating in dispute settlement, with weaker rules driving out stronger as governments
choose the jurisdiction which most favours their case.

Obviously the
mechanisms by which we assure the convergence of regional and multilateral systems needs a
great deal of further thought. I am hopeful that the new WTO Committee on Regional Trading
Agreements, under the very able Chairmanship of Canada's Ambassador to the WTO, John
Weekes, will make an important contribution to this process. For now, the important point
is to be clear about the necessity of this convergence.

It comes down
to a question of the sort of world we want to live in. Do we want a world where the
advance of global economic integration is matched by a global framework of agreed trade
rules which ensure openness and foster growth with stability? Or do we want a power-based
system where competing blocs attempt to regionalize the global economy with all the
economic and political stresses that would entail?

I make no
apology for putting the choice so starkly in terms of alternative visions. If the
multilateral system is not animated by a positive and challenging vision of its future how
can it hope to maintain dynamism and direction? Regional schemes have more often than not
a political vision guiding the trade initiatives and in many cases a clear timetable as
well. Why should the multilateral system be any less ambitious?

Conclusion

The
challenges I have outlined are contributing to a growing awareness that trade is not just
a technical question, but a matter of high political importance. In the WTO, the world now
has a permanent trade policy forum as well as a more effective means of negotiating
commitments and making and enforcing trade rules. Trade and trade policy have been put
back in the front row of international concerns, where they were intended to be by the
architects of the post-war international institutions. With the establishment of the WTO,
and the conclusion - which is expected very soon - of comprehensive agreements for
cooperation at every level with the World Bank and the IMF, the matrix of trade and
finance and development is not only completed but updated to contribute to global
prosperity and stability in the new century. This improved institutional cooperation is a
major step towards fulfilling the mandate given to the WTO by governments to work for
improved coherence in international economic policy-making.

The WTO has
been invited for the first time to participate, with the Bank, the Fund and the United
Nations, in the G7 Summit of leaders of the major industrialized economies, which will be
held this year in Lyon at the end of next month. This recognition of the importance of the
multilateral system is very welcome not only for itself but also because of the
opportunity it gives to reinforce the trade dimension in growth and development for
countries at all economic levels. Many of the themes that will be before the G7 leaders
will follow on from the Summit which Canada hosted in Halifax last year. The fact of
globalization will be the backdrop to the Summit's deliberations, as it is to every
serious economic discussion. It is my hope that the WTO, whose business is with the
lifeblood of global integration - trade - can help bring concrete and practical answers to
the questions that surround this process, especially the extension of its benefits to
those who are currently on the economic margins.

At the end of
next year, the multilateral trading system will be 50 years old. I would like to see this
anniversary properly observed; not just as a recognition of what the system has meant for
growth and stability in the world since 1947, but as a reaffirmation of its value for the
present and the future. Precisely how and where such a commemoration should take place is
a question for further discussion, possibly by Ministers at the Singapore meeting this
December. But I believe we should not waste such an opportunity to renew at a high
political level our commitment to the system which is the foundation of our present
prosperity and our future prospects.

Someone
observed to me recently that Canadians have multilateralism in their DNA, and it is
certainly true that Canada's contribution to the multilateral principle, whether in
economic or political affairs, has been an outstanding one. The most recent expression of
this was of course Canada's lead in advocating the establishment of the WTO at the end of
the Uruguay Round. I know that NAFTA and other regional initiatives have assumed an
increased importance in the Canadian policy landscape as in your economic life; but I am
confident that Canada will take the lead in demonstrating that there is no contradiction
between the active development of regional opportunities and a continuing firm commitment
to the multilateral principle. In this, as in so many other ways, Sylvia Ostry's influence
will continue to be felt.